WESTERN UNION CO (WU) Stock Fundamental Analysis
NYSE:WU - New York Stock Exchange, Inc. - US9598021098 - Common Stock - Currency: USD
WU gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 100 industry peers in the Financial Services industry. While WU has a great profitability rating, there are some minor concerns on its financial health. WU has a bad growth rate and is valued cheaply. WU also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
WU had positive earnings in the past year.
WU had a positive operating cash flow in the past year.
WU had positive earnings in each of the past 5 years.
WU had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of WU (10.97%) is better than 92.00% of its industry peers.
WU has a better Return On Equity (97.40%) than 99.00% of its industry peers.
The Return On Invested Capital of WU (8.06%) is better than 77.00% of its industry peers.
The Average Return On Invested Capital over the past 3 years for WU is below the industry average of 11.84%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.97% | ||
| ROE | 97.4% | ||
| ROIC | 8.06% |
ROA(3y)9.84%
ROA(5y)9.3%
ROE(3y)139.23%
ROE(5y)208.46%
ROIC(3y)9.8%
ROIC(5y)10.63%
1.3 Margins
The Profit Margin of WU (22.08%) is better than 79.00% of its industry peers.
WU's Profit Margin has improved in the last couple of years.
WU's Operating Margin of 17.82% is fine compared to the rest of the industry. WU outperforms 63.00% of its industry peers.
WU's Operating Margin has improved in the last couple of years.
With a Gross Margin value of 37.62%, WU perfoms like the industry average, outperforming 54.00% of the companies in the same industry.
In the last couple of years the Gross Margin of WU has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.82% | ||
| PM (TTM) | 22.08% | ||
| GM | 37.62% |
OM growth 3Y-6.29%
OM growth 5Y3.95%
PM growth 3Y11.78%
PM growth 5Y2.1%
GM growth 3Y-3.75%
GM growth 5Y-1.35%
2. Health
2.1 Basic Checks
WU has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
Compared to 1 year ago, WU has less shares outstanding
WU has less shares outstanding than it did 5 years ago.
WU has a worse debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 1.06, we must say that WU is in the distress zone and has some risk of bankruptcy.
WU has a better Altman-Z score (1.06) than 62.00% of its industry peers.
WU has a debt to FCF ratio of 7.94. This is a slightly negative value and a sign of low solvency as WU would need 7.94 years to pay back of all of its debts.
WU has a Debt to FCF ratio (7.94) which is comparable to the rest of the industry.
A Debt/Equity ratio of 2.97 is on the high side and indicates that WU has dependencies on debt financing.
WU's Debt to Equity ratio of 2.97 is on the low side compared to the rest of the industry. WU is outperformed by 73.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.97 | ||
| Debt/FCF | 7.94 | ||
| Altman-Z | 1.06 |
ROIC/WACC1.06
WACC7.6%
2.3 Liquidity
A Current Ratio of 1.29 indicates that WU should not have too much problems paying its short term obligations.
WU has a Current ratio of 1.29. This is comparable to the rest of the industry: WU outperforms 59.00% of its industry peers.
WU has a Quick Ratio of 1.29. This is a normal value and indicates that WU is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 1.29, WU is in the better half of the industry, outperforming 61.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.29 | ||
| Quick Ratio | 1.29 |
3. Growth
3.1 Past
WU shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -2.84%.
WU shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 0.23% yearly.
The Revenue has decreased by -5.15% in the past year.
Measured over the past years, WU shows a decrease in Revenue. The Revenue has been decreasing by -4.47% on average per year.
EPS 1Y (TTM)-2.84%
EPS 3Y-7.2%
EPS 5Y0.23%
EPS Q2Q%-8.89%
Revenue 1Y (TTM)-5.15%
Revenue growth 3Y-6.02%
Revenue growth 5Y-4.47%
Sales Q2Q%-6.24%
3.2 Future
WU is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 1.94% yearly.
The Revenue is expected to grow by 1.31% on average over the next years.
EPS Next Y4.52%
EPS Next 2Y4.26%
EPS Next 3Y4.92%
EPS Next 5Y1.94%
Revenue Next Year-1.05%
Revenue Next 2Y0.31%
Revenue Next 3Y0.78%
Revenue Next 5Y1.31%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 4.88 indicates a rather cheap valuation of WU.
Based on the Price/Earnings ratio, WU is valued cheaper than 91.00% of the companies in the same industry.
WU is valuated cheaply when we compare the Price/Earnings ratio to 27.30, which is the current average of the S&P500 Index.
WU is valuated cheaply with a Price/Forward Earnings ratio of 4.39.
WU's Price/Forward Earnings ratio is rather cheap when compared to the industry. WU is cheaper than 90.00% of the companies in the same industry.
WU's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 21.76.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 4.88 | ||
| Fwd PE | 4.39 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of WU indicates a rather cheap valuation: WU is cheaper than 94.00% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of WU indicates a rather cheap valuation: WU is cheaper than 82.00% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.85 | ||
| EV/EBITDA | 4.37 |
4.3 Compensation for Growth
WU's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
WU has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)1.08
PEG (5Y)21.22
EPS Next 2Y4.26%
EPS Next 3Y4.92%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 10.90%, WU is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 5.00, WU pays a better dividend. On top of this WU pays more dividend than 96.00% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.37, WU pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 10.9% |
5.2 History
The dividend of WU has a limited annual growth rate of 3.31%.
WU has paid a dividend for at least 10 years, which is a reliable track record.
WU has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)3.31%
Div Incr Years0
Div Non Decr Years18
5.3 Sustainability
35.33% of the earnings are spent on dividend by WU. This is a low number and sustainable payout ratio.
WU's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP35.33%
EPS Next 2Y4.26%
EPS Next 3Y4.92%
8.35
-0.24 (-2.79%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst Owners99.17%
Inst Owner Change0%
Ins Owners0.33%
Ins Owner Change7.24%
Market Cap2.76B
Analysts45.93
Price Target11.02 (31.98%)
Short Float %9.97%
Short Ratio4.3
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 10.9% |
Yearly Dividend0.93
Dividend Growth(5Y)3.31%
DP35.33%
Div Incr Years0
Div Non Decr Years18
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-4.22%
Min EPS beat(2)-6.98%
Max EPS beat(2)-1.46%
EPS beat(4)1
Avg EPS beat(4)-2.71%
Min EPS beat(4)-6.98%
Max EPS beat(4)2.03%
EPS beat(8)4
Avg EPS beat(8)3.62%
EPS beat(12)6
Avg EPS beat(12)4.95%
EPS beat(16)9
Avg EPS beat(16)6.07%
Revenue beat(2)1
Avg Revenue beat(2)-1.87%
Min Revenue beat(2)-3.95%
Max Revenue beat(2)0.21%
Revenue beat(4)1
Avg Revenue beat(4)-2.09%
Min Revenue beat(4)-3.95%
Max Revenue beat(4)0.21%
Revenue beat(8)4
Avg Revenue beat(8)0.4%
Revenue beat(12)5
Avg Revenue beat(12)-0.23%
Revenue beat(16)5
Avg Revenue beat(16)-0.91%
PT rev (1m)-1.53%
PT rev (3m)-6.95%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-2.32%
EPS NY rev (1m)-0.02%
EPS NY rev (3m)-0.6%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.46%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.54%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 4.88 | ||
| Fwd PE | 4.39 | ||
| P/S | 0.67 | ||
| P/FCF | 7.85 | ||
| P/OCF | 5.99 | ||
| P/B | 2.94 | ||
| P/tB | N/A | ||
| EV/EBITDA | 4.37 |
EPS(TTM)1.71
EY20.48%
EPS(NY)1.9
Fwd EY22.78%
FCF(TTM)1.06
FCFY12.74%
OCF(TTM)1.39
OCFY16.69%
SpS12.54
BVpS2.84
TBVpS-4.3
PEG (NY)1.08
PEG (5Y)21.22
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.97% | ||
| ROE | 97.4% | ||
| ROCE | 10.06% | ||
| ROIC | 8.06% | ||
| ROICexc | 9.68% | ||
| ROICexgc | N/A | ||
| OM | 17.82% | ||
| PM (TTM) | 22.08% | ||
| GM | 37.62% | ||
| FCFM | 8.48% |
ROA(3y)9.84%
ROA(5y)9.3%
ROE(3y)139.23%
ROE(5y)208.46%
ROIC(3y)9.8%
ROIC(5y)10.63%
ROICexc(3y)12.09%
ROICexc(5y)13.01%
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)12.02%
ROCE(5y)13.02%
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3Y-11.63%
ROICexc growth 5Y-2.69%
OM growth 3Y-6.29%
OM growth 5Y3.95%
PM growth 3Y11.78%
PM growth 5Y2.1%
GM growth 3Y-3.75%
GM growth 5Y-1.35%
F-Score5
Asset Turnover0.5
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.97 | ||
| Debt/FCF | 7.94 | ||
| Debt/EBITDA | 3.06 | ||
| Cap/Depr | 62.44% | ||
| Cap/Sales | 2.63% | ||
| Interest Coverage | 6.34 | ||
| Cash Conversion | 50.44% | ||
| Profit Quality | 38.43% | ||
| Current Ratio | 1.29 | ||
| Quick Ratio | 1.29 | ||
| Altman-Z | 1.06 |
F-Score5
WACC7.6%
ROIC/WACC1.06
Cap/Depr(3y)67.05%
Cap/Depr(5y)58.3%
Cap/Sales(3y)2.81%
Cap/Sales(5y)2.47%
Profit Quality(3y)62.33%
Profit Quality(5y)81.9%
High Growth Momentum
Growth
EPS 1Y (TTM)-2.84%
EPS 3Y-7.2%
EPS 5Y0.23%
EPS Q2Q%-8.89%
EPS Next Y4.52%
EPS Next 2Y4.26%
EPS Next 3Y4.92%
EPS Next 5Y1.94%
Revenue 1Y (TTM)-5.15%
Revenue growth 3Y-6.02%
Revenue growth 5Y-4.47%
Sales Q2Q%-6.24%
Revenue Next Year-1.05%
Revenue Next 2Y0.31%
Revenue Next 3Y0.78%
Revenue Next 5Y1.31%
EBIT growth 1Y-9.82%
EBIT growth 3Y-11.93%
EBIT growth 5Y-0.7%
EBIT Next Year25%
EBIT Next 3Y9.37%
EBIT Next 5Y3.92%
FCF growth 1Y-7.25%
FCF growth 3Y-32.58%
FCF growth 5Y-19.17%
OCF growth 1Y-11.25%
OCF growth 3Y-27.02%
OCF growth 5Y-14.98%